GTA Home Sales Show Signs Of Revival In May
May saw sales going strong with a 20% increase, continuing the trend of double-digit growth from last month. Home sales increased approx. 10% from April and 18.9% from May last year. While these numbers indicate that the market slowdown seen in the past months could be ending, the Toronto Real Estate Board’s calculations show they’re still below the 10-year trend for the month which typically sees over 10,000 homes sold.
Less Homes on the Market Makes It Competitive for Buyers
No increase in listings was seen from last year with number remaining at 19, 386 listings. Sellers are not motivated enough to sell keeping the supply and demand imbalance issue intact. This imbalance has led to a steady year-over-year increase of 3.6% to an average of $838,540. The Home Price Index, which measures the overall value of homes sold, rose by 3.1%.
In the City of Toronto, 6648 new listings were seen but sales increased by 13% with 3715 transactions, marking a 4% increase year over year. This resulted in a 7.8% increase in the average home price, at $937,804.
Home Prices Could Heat Up
TREB President Garry Bhaura says that the market is continuing to be supported by the region’s strong economic foundation, and that the impacts from the Fair Housing Plan and federal stress test are likely being absorbed.
“After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing. Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across a diversity of sectors,” he states.
“However, sales activity continues to be below the longer-term norm as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales.”
As per Jason Mercer, TREB’s chief analyst, the main risk to the market is lack of supply. “We are experiencing annual rates of price growth that are largely sustainable right now in the GTA – above the rate of inflation, but in the single digits,” he states. “If, however, we continue to see growth in sales outstrip growth in new listings, price growth will accelerate. Many households are not comfortable listings their homes for sale because they feel that there are no housing options available to better meet their needs.”
Houses See Most Sales Growth While Condos See Most Price Growth
Most sales growth was seen for detached and semi-detached houses, at 25% to 3,469 transactions and 27.9% to 1,019, respectively. Demand for townhouses rose 22.8% with 1,656 sold in May, while condo sales increased by 6.4% with 2,542 sold.
However, price growth was strongest for multi-family housing, indicating the affordability gap is closing as demand persists for the most affordable home types in the GTA. The average condo price increased 4.9% to $590,876, while townhouse prices rose 3.2% to $665,969. Detached and semi-detached houses were up by only 1.1% and 1.9% to averages of $1,042,218 and $827,250, respectively.
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